Investment property with HELOC & 1031 Exchange

[Ben Goodall]

I have a HELOC on one of my investment properties. I have used a portion of it to buy another rental property and am contemplating using the rest as a down payment for a primary residence. If next year, I decide to 1031 exchange this rental property into either one or two investment properties (equal or more in value) would the amount used to pay off the HELOC be subject to capital gains tax? If so, any suggestions as to which way to accomplish this and avoid or at least minimize the tax? Thanks in advance for your help!